Australia's BHP Billiton withdraws bid for Canada's PotashCorp

15 November 2010 05:03[Source: ICIS news]

SINGAPORE (ICIS)--BHP Billiton withdrew its $39bn (€28.5bn) takeover offer for Canadian fertilizer major PotashCorp and will recognise a $350m exceptional item charge in December for the failed transaction, the Australian mining giant said on Monday.

The bulk of the exceptional cost was related to the $45bn financing facility that BHP Billiton was trying to arrange for the acquisition, it said in a statement.

BHP Billiton withdrew its unsolicited offer to take 100% of PotashCorp about two weeks after the Canadian government invoked the country's investment law to block the bid.

"Unfortunately, despite having received all required anti-trust clearances for the offer, we have not been able to obtain clearance under the Investment Canada Act and have accordingly decided to withdraw the offer," said BHP CEO Marius Kloppers.

"We remain committed to Canada and we plan to develop a significant presence in the potash industry in Saskatchewan, he added.

BHP Billiton also announced the reactivation of its remaining $4.2bn component of its $13bn share buy-back program to reward its shareholders.

"The decision to reactivate the buy-back program is entirely consistent with our commitment to maintain an appropriate capital structure while we continue to make substantial investments in our growth projects," said BHP Billiton chairman Jac Nasser.

In a separate statement, PotashCorp said BHP Billiton's decision upheld the view that the unsolicited offer "substantially undervalued" the company and "failed to reflect both the value of our premier position in a strategically vital industry and our future growth prospects."